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Can I get some help with online lottery tax info

Topic closed. 74 replies. Last post 7 years ago by tiggs95.

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sunjune6's avatar - Lottery-010.jpg
Atlanta,GA
United States
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September 1, 2009
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Posted: October 18, 2009, 11:20 am - IP Logged

There  is a lot of discussion here about taxes and everyone seems to be saying the same thing just saying it differently. Basically, All gamblers cheat on their taxes. Anyone saying they don't is LYING BIG TIME.

If you think you can or if you think you can't you are right!

Today could be the day!

    marcie's avatar - Lottery-060.jpg
    Ohio
    United States
    Member #49980
    February 21, 2007
    34138 Posts
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    Posted: October 19, 2009, 10:28 am - IP Logged

    If you are speaking about playing online and playing with a site outside the USA, you do not pay USA taxes.  That's why it is illegal in the USA.  They can not figure out a way to make citzen pay taxes, so they tried to stop us from playing.

    Ok, that is the reason, if you play outside of U.S.A you don't pay any taxes. that why they don't want you to put this website up.5D, It makes since now.

    http://www.lotterypost.com/thread/233413    Sun Smiley Popular numbers

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      Kentucky
      United States
      Member #32652
      February 14, 2006
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      Posted: October 19, 2009, 1:28 pm - IP Logged

      "If the value of one of those tickets was over $599, I would be givenW2-G, it would be recorded as taxable income, and I could deduct all orany part of the $800 loss up to the value of the ticket."

      You're either doing a bad job of saying what you mean or you're confused about how it works. You seem to be saying that if you won $1200 on one ticket that you would only be able to deduct the $800 net loss, and therefore still have $400 in net income to pay taxes on.  What you'd actually have is a loss of $1999 on the 1999 tickets that didn't win. You'd also have only $1199 in income from the remaining ticket, since it cost $1. That's $1199 in taxable income, offset by $1199 of your $1999 in losses.

      Not many people would be playing scratch-offs if they bought $2000 worth of tickets and only one ticket was a winner and if that were true, I would have 1999 losing tickets. The overall odds is usually one out five tickets is a winner and payoffs for scratch-offs is around 60% so it's not unreasonable to expect to get back $1200 for every $2000 we spend.

      Maybe I wrongly assumed people understood casual gambling is a series of small wins and losses. Two weeks ago I bought three $2 scratch-off and one of those tickets "won" $25. I bought three more tickets and the clerk handed me $19; all three of those tickets were $2 winners and cashed them in for three more tickets that won nothing. My net winnings were $13 ($19 minus the initial $6 wager) and I have five losing tickets showing I spent another $10.

      Should I report $31 as gambling winnings, deduct $10 for the losing tickets on schedule A and pay tax on $21 when I only won $13?

      I forgot to mention that as a casual gambler, I also bought $15 worth of Powerball QPs during that time period and won nothing. I had $21 in my pocket and now have $19 so simple math tells me I actually lost $2 and common sense tells me I would be wasting my time keeping recites and a ledger for similar losing gambling sessions during a year.

      The state lotteries keep scratch-off sales records and that record will show nobody won because they always show a profit. The IRS requires them to report on a W2-G winnings over $599 and requires those winners to report it on their 1040 and those who don't will get a letter from the IRS about 18 months later telling them where to send unpaid taxes with interest and penalties.

      Simply put, you have to report winnings over $599 because there is a record but the majority of casual gamblers will lose money during the taxable year.

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        NY
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        October 16, 2005
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        Posted: October 20, 2009, 3:22 am - IP Logged

        Not many people would be playing scratch-offs if they bought $2000 worth of tickets and only one ticket was a winner and if that were true, I would have 1999 losing tickets. The overall odds is usually one out five tickets is a winner and payoffs for scratch-offs is around 60% so it's not unreasonable to expect to get back $1200 for every $2000 we spend.

        Maybe I wrongly assumed people understood casual gambling is a series of small wins and losses. Two weeks ago I bought three $2 scratch-off and one of those tickets "won" $25. I bought three more tickets and the clerk handed me $19; all three of those tickets were $2 winners and cashed them in for three more tickets that won nothing. My net winnings were $13 ($19 minus the initial $6 wager) and I have five losing tickets showing I spent another $10.

        Should I report $31 as gambling winnings, deduct $10 for the losing tickets on schedule A and pay tax on $21 when I only won $13?

        I forgot to mention that as a casual gambler, I also bought $15 worth of Powerball QPs during that time period and won nothing. I had $21 in my pocket and now have $19 so simple math tells me I actually lost $2 and common sense tells me I would be wasting my time keeping recites and a ledger for similar losing gambling sessions during a year.

        The state lotteries keep scratch-off sales records and that record will show nobody won because they always show a profit. The IRS requires them to report on a W2-G winnings over $599 and requires those winners to report it on their 1040 and those who don't will get a letter from the IRS about 18 months later telling them where to send unpaid taxes with interest and penalties.

        Simply put, you have to report winnings over $599 because there is a record but the majority of casual gamblers will lose money during the taxable year.

        "Should I report $31 as gambling winnings, deduct $10 for the losingtickets on schedule A and pay tax on $21 when I only won $13?"

        This goes back to the point I was making in my last post. You seem to be having trouble accounting for the deductible losses. In your previous post you referred to deducting $800 when the actual losses were $2000, and you've done that again here. If you bought 9 tickets at $2 each, you've got $18 in deductions, not $10. Deduct that from the $31 in winnings, and you'll get the correct net taxable income of $13.

        As for how you'd report it, how do you report your regular income? Do you just tell the IRS that your net taxable income is x, or do you report gross income and list deductions? You can tell them anything you want and everything will be fine right up until you get audited. When audit time rolls around, they won't settle for a simplified accounting that just says you won some and lost some with a net profit of a few bucks. Your point about the ratio of winners and losers with scratchers brings up another interesting point. If you claim a reported win of $1000 and show them $800 worth of losing $2 tickets, do you think they might ask about your incredibly bad luck in not having any winners out of 400 tickets?

          sunjune6's avatar - Lottery-010.jpg
          Atlanta,GA
          United States
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          September 1, 2009
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          Posted: October 20, 2009, 8:06 am - IP Logged

          "Should I report $31 as gambling winnings, deduct $10 for the losingtickets on schedule A and pay tax on $21 when I only won $13?"

          This goes back to the point I was making in my last post. You seem to be having trouble accounting for the deductible losses. In your previous post you referred to deducting $800 when the actual losses were $2000, and you've done that again here. If you bought 9 tickets at $2 each, you've got $18 in deductions, not $10. Deduct that from the $31 in winnings, and you'll get the correct net taxable income of $13.

          As for how you'd report it, how do you report your regular income? Do you just tell the IRS that your net taxable income is x, or do you report gross income and list deductions? You can tell them anything you want and everything will be fine right up until you get audited. When audit time rolls around, they won't settle for a simplified accounting that just says you won some and lost some with a net profit of a few bucks. Your point about the ratio of winners and losers with scratchers brings up another interesting point. If you claim a reported win of $1000 and show them $800 worth of losing $2 tickets, do you think they might ask about your incredibly bad luck in not having any winners out of 400 tickets?

          When it comes to "WINNINGS" at the race track it affects your tax bracket more than anything.  It's reported to IRS if $600 or more,  but you might just be stupid enough to stay there and lose it all back. As you leave   the track you have lost what you came with and the $600 that you HAD won. IRS doesn't care about your BAD HABIT(WINNING AND LOSING IT BACK). Their records show you won $600 and you had best report it when you file your tax. Off-set all of your loses up to the $600,  yes, but you may have a lot more loses than the $600. IRS doesn't have or care to have records of your other ups and down.  The $600 is all they are concerned about and you got a 1099 when you claimed the prize. No matter what goes down your increase in income will push you into a higher tax bracket. But as you left the track your winnings are gone and you are broke. You may have come to the track with $1000. On your last $100 you hit a race for the $600. You sit there and lose the $600. Your losses are $1000, but IRS will only allow $600.

          I have did it many of times. Over a years time your reported winnings could be in the 10's of thousands, your wallet doesn't show it and your tax brackket will be changed because of the reported taxable  winnings. THAT'S THE BOOMER!

          If you think you can or if you think you can't you are right!

          Today could be the day!

            tiggs95's avatar - Lottery-036.jpg

            United States
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            Posted: October 20, 2009, 8:31 am - IP Logged

            sunjune6..If you win 600.00 or more at the track you don't have to report it the tarck will do that for you when you make out a IRS form or you don't get the money..If you don't wan't to pay any taxes on it tear up the ticket and throw it away or give it to someone else..I remeber a guy hitting a winner that paid like 2 grand and he had someone else cash it and gave him part of the winnings so he diden't have to pay taxes..

             

            To the person who said everyone cheats on thier taxes or thier lying I guess me and my wife are liars cause in all our years we have never cheated..We have our taxes made out every year by people who know what they are doing..We report eveything cause it's all on paper..

              truecritic's avatar - PirateTreasure
              Michigan
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              Posted: October 21, 2009, 5:13 am - IP Logged

              sunjune6..If you win 600.00 or more at the track you don't have to report it the tarck will do that for you when you make out a IRS form or you don't get the money..If you don't wan't to pay any taxes on it tear up the ticket and throw it away or give it to someone else..I remeber a guy hitting a winner that paid like 2 grand and he had someone else cash it and gave him part of the winnings so he diden't have to pay taxes..

               

              To the person who said everyone cheats on thier taxes or thier lying I guess me and my wife are liars cause in all our years we have never cheated..We have our taxes made out every year by people who know what they are doing..We report eveything cause it's all on paper..

              "To the person who said everyone cheats on thier* taxes or thier* lying I guess me and my wife are liars cause in all our years we have never cheated."

              Oh!  So then, we can just ignore ALL your previous posts in this thread?  You reported those lottery tickets that you cashed at Kroger's afterall?

               

              *(thier? maybe you mean their?)

              *(thier? maybe you mean they're?)

                Jordans121's avatar - nw bookeep.jpg

                United States
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                Posted: October 21, 2009, 5:20 am - IP Logged

                It is illegal to play online so do not worry about paying taxes on it. If you were caught doing illegal wagers they could charge you a hefty fine and  clean your bank account if necessary especially if you dont work. Plus, it is a 3rd degree misdemeanor which could land you in jail for about 7 months. Non the less, these things probably won't happen.

                "Many Strategies|One Game"

                  tiggs95's avatar - Lottery-036.jpg

                  United States
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                  Posted: October 21, 2009, 8:29 am - IP Logged

                  trucritic...When I cash ANY ticket and they ask for my SS card I do the RIGHT thing and give it to them and make out the SS forms that are needed..If they pay me and don't ask for my SS card I don't beg them to please make me pay taxes but they say you don't have to pay taxes on a ticket under 600.00  DUUUUH..Wake up and smell the roses..You don't know everything like you think you do...I guess..Each ticket was for 400.00...3 times 400.00 is 1200.00..I could have cash them mone at a time but the clerk said no she would pay me all at once..Also if I needed to pay taxes the lotto would machine would tell the clerk I needed to..Man oh man..

                    sunjune6's avatar - Lottery-010.jpg
                    Atlanta,GA
                    United States
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                    Posted: October 21, 2009, 10:14 am - IP Logged

                    sunjune6..If you win 600.00 or more at the track you don't have to report it the tarck will do that for you when you make out a IRS form or you don't get the money..If you don't wan't to pay any taxes on it tear up the ticket and throw it away or give it to someone else..I remeber a guy hitting a winner that paid like 2 grand and he had someone else cash it and gave him part of the winnings so he diden't have to pay taxes..

                     

                    To the person who said everyone cheats on thier taxes or thier lying I guess me and my wife are liars cause in all our years we have never cheated..We have our taxes made out every year by people who know what they are doing..We report eveything cause it's all on paper..

                    The track has reported it and that is why you had best report it WHEN YOU FILE YOUR TAXES or you will get fined for under reporting your income.

                    I will guess you and your wife have never been to the track and won anything under $600. If you say you never cheated on your taxes; that's great.  If you gamble; you cheat, because you are not reporting all of your winnings, or , you have never won anything.

                    If you think you can or if you think you can't you are right!

                    Today could be the day!

                      truecritic's avatar - PirateTreasure
                      Michigan
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                      Member #22395
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                      Posted: October 21, 2009, 10:39 am - IP Logged

                      trucritic...When I cash ANY ticket and they ask for my SS card I do the RIGHT thing and give it to them and make out the SS forms that are needed..If they pay me and don't ask for my SS card I don't beg them to please make me pay taxes but they say you don't have to pay taxes on a ticket under 600.00  DUUUUH..Wake up and smell the roses..You don't know everything like you think you do...I guess..Each ticket was for 400.00...3 times 400.00 is 1200.00..I could have cash them mone at a time but the clerk said no she would pay me all at once..Also if I needed to pay taxes the lotto would machine would tell the clerk I needed to..Man oh man..

                      The IRS tax code tells you to report $1,200 on your Income Tax Form.   If and when you win enough that they have you fill out forms, the amount they take (I think 28%? + State Income tax, if your State has one) is NOT necessarily the tax you owe.  You could owe more or you could owe less.  They only do that to guarantee they get at least that much.  What you have to report has no bearing on whether or not they take your SS.

                      NOWHERE will the lottery say you owe taxes or how much (other than them keeping the 28%) - certainly not some sales clerk in a store.  But I would be willing to bet if you called your main lottery office and told them you won $1,200, they would tell you what line number you report that on your taxes.

                      "We have our taxes made out every year by people who know what they are doing.."

                      Since you use a tax preparer, ask them if the law says you have to report winning $1,200.

                      So, as of now, we go full circle back to "all gamblers cheat on their taxes. Anyone saying they don't is LYING BIG TIME."

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                        Kentucky
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                        Posted: October 21, 2009, 10:56 am - IP Logged

                        "Should I report $31 as gambling winnings, deduct $10 for the losingtickets on schedule A and pay tax on $21 when I only won $13?"

                        This goes back to the point I was making in my last post. You seem to be having trouble accounting for the deductible losses. In your previous post you referred to deducting $800 when the actual losses were $2000, and you've done that again here. If you bought 9 tickets at $2 each, you've got $18 in deductions, not $10. Deduct that from the $31 in winnings, and you'll get the correct net taxable income of $13.

                        As for how you'd report it, how do you report your regular income? Do you just tell the IRS that your net taxable income is x, or do you report gross income and list deductions? You can tell them anything you want and everything will be fine right up until you get audited. When audit time rolls around, they won't settle for a simplified accounting that just says you won some and lost some with a net profit of a few bucks. Your point about the ratio of winners and losers with scratchers brings up another interesting point. If you claim a reported win of $1000 and show them $800 worth of losing $2 tickets, do you think they might ask about your incredibly bad luck in not having any winners out of 400 tickets?

                        We really don't know there will be any gambling winnings until the session is over and the taxable year is that session. The IRS doesn't expect or require the casual gambler to report every wager they make and the results, but they do require the operators to report a winning $1 wager where the payoff is over $599. Not one clerk has every asked for my SS number when I bought tickets nor has one asked for it when I've cashed small winners.

                        "how do you report your regular income?"

                        My employer reports my earnings to the IRS similar to a gaming operator reporting wins over $599. The IRS and the U.S. Government has no authority over offshore operators and that's one of the reasons Congress has made it difficult for US citizens to open an online account.

                        "If you claim a reported win of $1000 and show them $800 worth of losing $2 tickets, do you think they might ask about your incredibley bad luck in not having any winners out of 400 tickets?"

                        I gave as an example of something a casual might might do; having $11 in my pocket, buying three $2 scratch-off and five $1 Powerball tickets. One of the scratch-offs was a $25 so I cashed it, bought three more $2 scratch-offs, another five QPs, and the clerk handed me $14 which I put back into my pocket. All three of the scratch-offs were $2 winners so I cashed them for three more scratch-offs and took $5 out of my pocket and bought five more QPs. Those three tickets were losers as were the fifteen QPs and at the point I had $9 in my pocket for a overall $2 loss.

                        Some people would say I should report $31 as gambling winnings and deduct the losses by keeping the five $2 losing scratch-offs the fifteen losing $1 PB QPs. Even if the auditor didn't raise an eyebrow about the losing tickets that would still show me with a net win of $6 when I know for a fact I actually lost $2. Looking at it another way, I ended buying $33 worth of lottery tickets for $2 and since the IRS doesn't require the operator to report who bought the tickets or payoffs under $599, I'm not reporting it.

                        Back to the shoe box full of losing tickets some players keep; I personally know a guy that won $100,000 and deducted $100,000 in gambling losses. He asked everybody he knew to keep their losing tickets for him and even went to race tracks picking up losing tickets off the floors. I asked him if it ever occurred to him that he might be asked how he wagered that much before he hit the jackpot and said his accountant said it was legal. To my knowledge he never was audited but there is no record of who bought those tickets so his accountant maybe correct.

                          tiggs95's avatar - Lottery-036.jpg

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                          Posted: October 21, 2009, 11:07 am - IP Logged

                          sunjune6..WAKE UP...If the track reports any ticket they cash for me and I have to pay taxes on that ticket that means I have made out the SS form..I have to be the one at the track to file the form for the IRS they don't know my ss number name or address UNLESS I TELL THEM...Man WAKE UP..How do you think the IRS get's my name..I MAKE OUT THE FORM ..Man oh man..Excuse me while I bang my head against the wall..They MAKE me make out the SS form before I can get my money if it pays 600.00 or more..Read your IRS laws...

                            tiggs95's avatar - Lottery-036.jpg

                            United States
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                            Posted: October 21, 2009, 11:12 am - IP Logged

                            trueritic..Each ticket was 400.00..You do not have to pay any taxes on a 400.00 ticket<<----Do you understand this?...I could have cashed each ticket one at a time if that would have made you feel better..I wish Todd would read this and try to explain it to you..I can't get thru..Bang Bang Bang<<<-----Banging my head agaist the wall..

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                              Kentucky
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                              February 14, 2006
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                              Posted: October 21, 2009, 11:16 am - IP Logged

                              The track has reported it and that is why you had best report it WHEN YOU FILE YOUR TAXES or you will get fined for under reporting your income.

                              I will guess you and your wife have never been to the track and won anything under $600. If you say you never cheated on your taxes; that's great.  If you gamble; you cheat, because you are not reporting all of your winnings, or , you have never won anything.

                              Back in the day when race tracks used tote machines, the tickets were bought and cashed at separate windows. They did fill out a W2-G on a reportable winning ticket with the name and SS number of the person cashing the tickets but there were no record of who cashed the other tickets. Today race tracks use computers similar to lottery terminals and the computer keeps track of transactions. Other than a W2-G there is no record of who bought the tickets or cashed them. The computer would show it paid out three $400 prizes for a total of $1200 without any name or SS number being reported.

                              How could anybody be cheating on their taxes when every state lottery shows a profit which means by their point of view, there was no gambling winnings?